It's bad enough that the market is down 40% from its high in October 2007, and that the major indices -- and for many, our index-fund-powered 401(k) balances -- are sitting at 1997 levels.

It's bad enough that at most businesses, the idea of a defined-benefit pension plan is about as popular -- and seen about as often -- as a manual typewriter. Or a dodo bird.

But now comes a new trend rubbing even more salt in our retirement-hope wounds: Employers are cutting -- and in some cases, entirely eliminating -- their 401(k) matches.

And for many, that loss will make the daunting task of saving for retirement seem almost impossible.

Is your employer on this list?
The list of companies that have cut or eliminated matches in recent months is long, and getting longer every day. These are just a few examples from recent headlines:


CAPS Rating
(out of 5)

Recent Change Made

JPMorgan Chase (NYSE:JPM)


Eliminated match

PPG Industries (NYSE:PPG)


Eliminated match

Cliffs Natural Resources (NYSE:CLF)


Suspended match for salaried employees

Double-Take Software (NASDAQ:DBTK)


Eliminated match

Pacer International (NASDAQ:PACR)


Suspended match for 2009



Eliminated match

Morningstar (NASDAQ:MORN)


Suspended match

The first two aren't surprising, but the others are well-regarded companies thought -- by CAPS players, at least -- to be in good shape. And that's worrisome. It's not surprising to see a troubled bank or industrial company eliminate a 401(k) match as part of broader cost-cutting measures in this economy. And it's true that just about every company is looking to reduce expenses right now.

But the sheer number of companies doing this -- the Pension Rights Center, a Washington advocacy group, says it's aware of more than 200 companies that have announced plans to cut or trim their matches -- suggests that the 401(k) match is now seen as an easy thing to eliminate, rather than a key cost of doing business.

That's worrisome. Clearly this is a trend that is picking up steam, and that means that even if your employer hasn't made a move in this direction yet, it's something you need to be thinking about.

But retirement is so far off, and I've got bigger problems right now!
I hear that. The easy advice to give here is "max out all your contributions to make up the difference." But I know that for a lot of people, that's not useful. Maxing out your 401(k) contributions is always a good thing to be doing if you can afford it.

But if your immediate financial priority is to pay down enough debt to get your household spending to a sustainable level, or to keep all the financial balls in the air while your laid-off spouse hunts for a job, or just to build up your short-term savings buffer in case your situation takes a turn for the worse, it's not helpful advice.

But even if you can't increase the amount of money you're saving for retirement, there are things you can be doing to make the most of what you've already got. 

Three steps
Take a little time to sit down -- yeah, right now -- with your 401(k) and IRA statements. As you look through your lists of holdings, ask yourself these questions:

1. Does my asset-allocation plan make sense? Is it current? Having an asset-allocation plan in place is extremely important, especially during uncertain, volatile market conditions. An asset-allocation plan is essentially a road map to wealth -- it shows you how to invest to maximize your chances of return while staying consistent with your time horizon and your tolerance for volatility.

Your employer or your plan's provider probably has a Web-based tool that will give you an asset-allocation plan built around the options in your plan. Those can vary in quality -- generally speaking, they err on the side of being too conservative, thanks to the legal department -- so it's worth sanity-checking the recommendations you get with an independent source. The Fool's Rule Your Retirement service maintains some great model portfolios for exactly this purpose. (If you're a subscriber, you can log in and look under the "Resources" tab.)

2. Am I using my mix of account types most effectively? If you've been at this retirement-saving thing for a while, you probably have one or more IRAs in addition to your 401(k) holdings. Here's a key insight that a lot of people miss: That's all one portfolio. Your asset-allocation plan should include everything you think of as "retirement savings," and you should use each component to its best advantage.

Here's what I'm getting at: If, say, the equity funds in your 401(k) plan aren't to your liking, use your IRAs to buy stocks, and hold bonds with all or part of your 401(k) instead (or vice versa). The advantage of an IRA is that it can contain nearly anything you'd want -- bonds, mutual funds, a basket of dividend-paying stocks, whatever. 

3. Do I need help? Let's face it -- this stuff isn't easy. If your plan has a lot of options, or if you're trying to make a lot of different accounts work together within a single asset-allocation strategy, getting professional help might be just what you need.

But investment advisers can be expensive, and more spending probably isn't what you need right now. As an alternative, consider giving the Fool's Rule Your Retirement service a try. They've got an extensive library of articles, fund recommendations, asset-allocation help, and -- yes -- a professionally staffed discussion board where you can get your questions answered quickly. A year's subscription costs less than your first meeting with an investment adviser -- and better yet, you can try it absolutely free for 30 days. Click here to get started now.

Fool contributor John Rosevear has no position in the companies mentioned. Double-Take Software and Morningstar are Motley Fool Stock Advisor recommendations. PPG Industries is a Motley Fool Income Investor pick. The Fool owns shares of Morningstar. The Motley Fool has a disclosure policy.